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Mr. Evans: I will not give way to the hon. Gentleman, because I know that my hon. Friend wants the Government's full response. In fairness, the hon. Gentleman cut into my time to some extent.
The benefits of our approach can be seen in the steady and continuing progress on property law reform over past years. All measures have proceeded, or are proceeding,
with general support. That is in large part due to the lengthy consideration that they received before they were introduced into Parliament. Proposals that eventually found fruition in the Landlord and Tenant (Covenants) Act 1995 were transformed through that process from matters of deep controversy to a measure supported by all political parties and a wide range of interests of all sizes and types in the property industry.
I was hoping that during the debate we would see consensus across the Floor of the House on the needto proceed with commonhold. As anyone who has considered the original draft Bill will be aware, the aims and purposes of commonhold can be stated easily enough but the legislation required to implement the scheme will necessarily be complex.
I shall explain the reasons for the necessary complexity. Before I move on from the original consultation on commonhold, however, I should say something about one of the issues at the forefront of the consultation exercise. I refer to the circumstances in which conversion to commonhold will be compulsory.
The Government's consultation paper was issued prior to the enactment of the Leasehold Reform, Housing and Urban Development Act 1993. That measure fully implemented the Government's proposals for a leasehold enfranchisement scheme. It enabled tenants to acquire collectively the freehold of the building in which their flats were situated. When the proposals for commonhold were first mooted, they were closely associated with leasehold enfranchisement. Indeed, I expect that, following the implementation of commonhold, the two schemes will be complementary. However, commonhold is to be a stand-alone scheme.
In implementing commonhold, the Government have no plans to extend the right of tenants compulsorily to acquire the freehold of their buildings. To attempt to do that and to re-open the issue of leasehold enfranchisement in that way would, in our view, muddy the watersand introduce unnecessary controversy into the implementation of a reform that I believe is supported on both sides of the House. That point has been made with some force by my hon. Friend the Member for Kensington. In that regard, he was absolutely right.
The implementation of commonhold will necessarily involve the passing of detailed technical legislation.
Mr. Evans:
It is not that the basic principles of commonhold are particularly difficult to define. I have indeed endeavoured to touch upon most of them.
The Bill makes a creditable attempt to cover the main planks of the scheme. The difficulty with legislation will be in ensuring that commonhold schemes--they will
represent one of the most fundamental changes in property law--will work efficiently and fairly, and without anomaly, in the context of the greater mass of the law generally, and of property and company law in particular.
The newness of the concept of commonhold has great advantages but great care must be taken to ensure that it does not bring with it outweighing disadvantages. It is necessary to provide comprehensively for a system that is superior to leaseholds while things are going well and to ensure that the same system does not result in a worse situation if things go wrong.
In my view, most landlords are decent, honest and competent. The problems lie with those who have not become such, so as to require legislative intervention. Great care must be taken, therefore, to ensure that the commonhold scheme is able effectively to deal with bad cases. Commonhold should not be capable of being used a vehicle for fraud. Nor should it be possible for continuing incompetent or dishonest operations to be hidden from view in a commonhold association.
Propositions such as these are simple to state but great care will be necessary to put them into practice. We must ensure that legislation meshes with existing law, and that the necessary protections and safeguards are reproduced as required.
I am pleased to report to the House that my officials, with the assistance of officials from other interested Departments, have been engaged in detailed work on these matters for some time and are in the course of preparing a commonhold Bill that will set out the complete regime for implementing commonhold. I hope that it will be possible for the Bill to be published for consultation during the summer so that hon. Members and others will have the maximum opportunity to consider the Government's proposals in detail.
The Government are determined to proceed with their task of preparing commonhold for implementation and will introduce the new Bill as soon possible to ensure that this important reform reaches the statute book. The issues that are being addressed to prepare the new commonhold Bill include corporate status. One has only to consider the implications arising from the fact that commonhold associations will be corporate bodies with legal personalities quite distinct from that of their individual members. Commonhold associations will therefore be different from, for instance, residents associations in existing leasehold developments, while their corporate status would afford them significant advantages in managing--
It being half-past Two o'clock, the debate stood adjourned.
Debate to be resumed upon Friday 12 July.
Remaining Private Members' Bills
Order for Second Reading read.
Second Reading deferred till Friday 12 July.
Order for Second Reading read.
Second Reading deferred till Friday 22 March.
Order for Second Reading read.
Madam Deputy Speaker (Dame Janet Fookes):
Second Reading what day? No day named.
Order for Second Reading read.
Madam Deputy Speaker:
Not moved.
Order for Second Reading read.
Second Reading deferred till Friday 22 March.
Order read for resuming adjourned debate on Second Reading [26 January].
Madam Deputy Speaker:
Debate to be resumed what day? No day named.
Motion made, and Question put,
(1) the Speaker shall put the Questions necessary to dispose of proceedings on the Motion in the name of Mr. Tony Newton relating to Welsh Business not later than Ten o'clock, and such Questions shall include the Questions on any amendments to the said Motion which she may have selected and which may then be moved; and
(2) Standing Order No. 52 (Consideration of estimates) shall apply with the insertion in line 41, after the words 'At Ten o'clock', of the words 'or immediately after the previous business has been disposed of, whichever is the later'.--[Mr. Brandreth.]
Hon Members: Object.
Debate to be resumed upon Monday next.
Ordered,
Motion made, and Question proposed, That this House do now adjourn.--[Mr. Brandreth.]
Mr. Peter L. Pike (Burnley):
I am glad to have the opportunity to debate local government spending in Lancashire, and especially the lack of Government support. I am grateful for this chance to discuss the matter, especially after the Minister's answer to me on27 February when, at the end, he said:
It is not the Labour councillors in Lancashire who should resign, but him and the Government. They should give the people the opportunity to elect a new Government--and the quicker the better.
When the Tory party was elected to office in 1979, it had said during the election campaign that it wanted to free town halls. Ever since they took office in 1979, the Government have shackled local government by their legislation, and even more by the financial restraints that they have imposed. I refer particularly to Lancashire and its funding, but what I shall say applies to almost every council in the country.
Before I came to the House, I was a member of Burnley borough council, first as chairman of finance and then as leader of the council. I used to think that the position could not get worse, yet, year after year, it gets worse. The best example of saying one thing when not in office and doing another when in office is what the Tory party has done to local government.
Although today I shall concentrate on revenue spending, similar arguments apply to capital spending. The local education authority has no capital available to build or repair schools. Councils do not have the money to build urgently needed housing to rent or to improve housing stock. We are seeing housing standards decline. What a dismal, appalling record of 17 years in office.
According to the Association of County Councils, in Lancashire the band D council tax--I will use band D as an example--in 1996-97 will increase from £528.35 to £557.49, an increase of 5.5 per cent. Yet at the same time, the council has had to cut the services it provides because of the Government's appalling national underfunding of local government. I argue that, in total, they underfunded local government by about £3.66 billion in 1996-97. If we examine that figure, we see that it is even below the current spending level. That is appalling.
For continuation of service at the present level, allowing for inflation and so on, Lancashire county council would have to spend £978.1 million. The standard spending assessment--the figure that the Government say the council should need to spend--is £889.5 million. The capping limit--the limit up to which it is allowed to spend--is £934.6 million. The difference between the continuation of service estimate and the capping limit imposed by the Government is £43.5 million.
Lancashire county council has no intention of breaking the law, so it has been forced to reduce its expenditure budget by that figure. It has done so by several means. It has reduced the services committee estimates by about
£18.5 million. Library hours have been cut. It fought hard not to close any library, because it felt that that would be an appalling thing to do. Cuts have been made in museums and the arts, and some £6 million has been cut from social services, which are absolutely crucial. We have had to cut £9 million from our budget for repair and maintenance of roads and road building in the year ahead.
In order not to have to impose further cuts, the council has used balances and reserves and sold some assets. That has brought in £16 million. That sort of thing can only be done once. The council cannot keep selling assets. Once it has sold them, it does not have them to sell. What will it do in future years? If it has no balances left, it cannot use them again.
In the Budget this year, the Government announced that priority was to be given to schools. They said that it had been a tight expenditure round. I would have said that it was not just a tight, but an appalling, expenditure round.
Lancashire has given the £26 million provided for its schools to the delegated schools budget, and the primary and secondary schools' budgets have been increased by 5.1 per cent. So Lancashire has again conformed with the Government's view, but if it gives that money in the way that the Government wish, it has to make bigger cuts in other areas. That means that, within education, leaving aside the schools budget, items such as discretionary grants, youth services and so on have had to bear an even greater burden of cuts than would otherwise have been the case.
I have received today, purely by chance, a letter from Lancashire county council in response to a complaint from a Mrs. Gregory, who is one of my constituents. She is not the only person who has raised this issue. She is connected with the running of the girl guides and brownies in her part of Burnley. They now have to pay for the use of premises, because the county council can no longer provide funding. In this day and age, it is totally unacceptable if we have to make cuts that affect our young people in that way.
The district auditor said:
in Lancashire. The estimated balance of the county fund at 1 April 1996 will be £14.2 million, falling to£8.5 million at the end of the current financial year on31 March 1997, which is less than 1 per cent. of 1996-97 net expenditure. The district auditor believes that that is the prudent minimum that the county needs to keep in its reserves and balances.
In a report to Parliament on 30 November 1995, Lancashire education authority was shown to spend1.5 per cent. on administration, which is well above the average in efficiency and, again, shows how well the county council is run. Lancashire continues to have the support of the district auditor. In his latest management letter, published recently, he said:
He also said:
We also note that, in 1995-96, central administration in Lancashire is 1.87 per cent. of the potential schools budget, against an average for county councils as a whole of 2.09 per cent. and an average of 2.22 per cent. in all local education authorities. Again, that shows that Lancashire county council is not top heavy in administration, but keen to provide the services to the people of the county that are so essential--services that it was elected to provide.
With spending at 5.1 per cent. above standard spending assessment, Lancashire has one of the highest spends above SSA of all the shire counties. That largely results from the inadequacies of the SSA system, and the Government need to deal with it. It also results from the high needs of the county. I stress to the Minister that he must consider county councils that have particular needs. In Lancashire, our needs are due to deprivation, poverty, low wages, unemployment, and, in many parts of the county, the industrial heritage that has left us with dereliction that must be cleared as we go forward to the 21st century.
The area cost adjustment overstates the cost differential between the south-east and the rest of the country. By rectifying that discrepancy, the county council would, in our view, gain about £9 million in standard spending assessment. I am sure that the Minister will say that the Government are reviewing that. I know that it is being reviewed, but we had the problem in 1995, and we will have it in 1996-97. He knows that, whatever the review yields--he does not know what the outcome will be, any more than I do--and even if it is favourable in the way that I would wish, it will not solve this year's problems, nor those of the new financial year, which starts in a few weeks.
I shall give one example of what the area cost adjustments will mean for education. Schools in Essex have been provided with an SSA of £2,055 per primary school pupil and £2,791 per secondary school pupil. The comparative figures for Lancashire are £1,964 and £2,615 respectively. If one multiplies the number of children involved, one can see the vast difference in millions of pounds that it makes for Lancashire county council. We accept that some adjustment may need to be made for the London area, but we believe that the present adjustment is too high and needs to be reviewed--Lancashire should get more money as a result.
The Government's assumption that authorities generate interest payment receipts in relation to their size isflawed. Consequently, the Government over-estimate Lancashire's ability to generate revenue receipts by approximately £4 million, resulting in a reduction in the standard spending assessment.
Lancashire has an acute need for more money. It believes in the provision of services. I am sure that the Minister will recognise that, for county councils, the most expensive services to provide are education and social services. That would be so whichever party was in office. I know that, before he was elected to the House, the Minister--like me--had experience in local government, which is extremely useful for any politician.
Education and social services are expensive because they are both labour-intensive and crucial. Social services deal with people in need, whether they be elderly or disabled, and education services cater for young children whose start in life is the biggest investment we can make in the nation's most important asset for the future.
That, at the sitting on Monday 11th March--
That, at the sitting on Thursday 14th March, notwithstanding Standing Order No. 14B (Proceedings under an Act or on European Community Documents), the Speaker shall put the Questions on the Motions in the name of Mr. Secretary Howard relating to Prevention and Suppression of Terrorism not later than three hours after the commencement of proceedings on the first such Motion; and the said Motions may be proceeded with, though opposed, after Ten o'clock.--[Mr. Brandreth.]
8 Mar 1996 : Column 625
2.32 pm
"If Labour councillors cannot manage, perhaps they should resign."--[Official Report, 27 February 1996; Vol. 272, c. 707.]
"the level of balances is as low as is prudently acceptable"
"Prudence and accountability have been features of the financial arrangements in the County Council for many years. This tradition of excellence continues despite the challenges of the present financial constraints."
"We remain content that the overall management arrangements of the Lancashire County Council are sound and that a healthy culture exists within the County Council for the achievement of economy, efficiency and effectiveness in service delivery."
8 Mar 1996 : Column 627
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